Among the four economics shocks listed below, you must comment on each shock by stating which shock
Question:
Among the four economics shocks listed below, you must comment on each shock by stating which shock is the most preferred and the least preferred from the point of views of the economic policy advisors. Provide reason for each comment. If unclear (i.e, cannot clearly say whether more or less preferred), state unclear and explain why. To answer, fill the cell marked with? in the following table
Start from the situation where the economy is at potential output and then think about the shocks. No need to draw the AD-AS figure. Also, no need to comment on the policy reaction to each shock.
Type of shock | Comments | Reasons |
Positive supply shock | ? | ? |
Negative supply shock | ? | ? |
Positive demand shock | ? | ? |
Negative demand shock | ? | ? |
Taxes and Business Strategy A Planning Approach
ISBN: 9780132752671
5th edition
Authors: Myron Scholes, Mark Wolfson, Merle Erickson, Michelle Hanlon